Officials at Coinbase have stated that they must quickly become the “Amazon Web Services of cryptocurrency.”
Coinbase aims to be the AWS of crypto
Coinbase, a cryptocurrency exchange based in the United States, is aiming to leverage Amazon Web Services’ (AWS) success by establishing its own cloud infrastructure solution, Coinbase Cloud.
In an exclusive interview with Forbes, Coinbase chief product officer Surojit Chatterjee remarked, “We want to be the AWS of crypto.” “We’re constructing the entire Coinbase Cloud suite of products, which you can think of as crypto computing services, to enable developers to build apps faster.”
Bison Trails, a cloud-based staking infrastructure solution that Coinbase purchased earlier this year for an undisclosed amount that was speculated to be above $80 million, was the service’s previous moniker. Bison Trails is a non-custodial platform, which means it does not manage clients’ staked funds.
In Seattle, Amazon Web Services (AWS) was formerly a secondary consideration, overshadowed by Amazon. Despite this, Amazon’s subsidiary, which launched nearly two decades ago, is now the company’s main earnings generator. On a sales base of $45.3 billion, or 63 percent of its parent company’s total, AWS earned $13.5 billion in yearly operating earnings in 2020.
Officials have stated that they must quickly become the “Amazon of cryptocurrencies.” Because the majority of its awards come from not only being the first big digital currency company to go public but also for doing so with the largest direct listing ever, its revenue stream is unduly reliant on transaction fees.
This is frequently the case with line items that are dominated by the revenue concentration of a single category. Because Facebook and Google, for example, rely nearly solely on advertising to produce money, their line items tend to have this level of income concentration.
An attempts to avoid risk
On the other hand, the platform and other exchanges may be extremely susceptible due to their reliance on the market and total trade volumes. Because trading volumes are so closely connected to price volatility, such reliance can be a huge disadvantage for cryptocurrency exchanges like Coinbase.
To avoid this risk, they are attempting to increase trading revenue by offering subscription services that are more immune to market volatility.
It offers institutional custody, staking options, a learning platform with crypto as a reward, an e-commerce checkout system, and the ability to issue Visa debit cards to clients, among other things. It’s also experimenting with a subscription model that would provide clients with a monthly trading allowance for a fixed fee.
According to Chatterjee, the acquisition of Bison Trails was a crucial milestone in Coinbase’s shift to a more mature financial system. Crypto custodians, funds, decentralized apps, and token holders are all supported by the platform. Andreessen Horowitz (a16z), Current, a New York-based fintech startup, and Turner Sports are among its clients.
Coinbase Cloud has $30 billion in crypto assets on its platform as of November 2021. Coinbase, one of the most prominent cryptocurrency exchanges, has over 73 million legitimate consumers, 10,000 enterprises, and 185,000 ecosystem partners in over 100 countries. Coinbase claims to have processed over $700 billion in transactions since its inception.
